New Laws for Flippers in California

[Sammy Lyon]

There are new laws affecting California transactions in 2024, some of which are very relevant to investors and house flippers.

According to the California Association of Realtors, starting July 1, 2024 most 1-4 unit properties that are resold within 18 months (aka flips) must disclose:

- repairs, renovations, room additions and structural modifications that were performed by a contractor with whom the seller entered into a contract

- the name and any contact info for the contractor for any work over $500

- any permits obtained

So you still can be an HGTV star, just make sure you do it by the book. :)

Have any of you flipping in the Los Angeles area been affected by these new disclosures?

It hasn't come up for me on a transaction yet and I'm curious how it's playing out in practice!

For more info, check out the law itself AB968: https://legiscan.com/CA/text/AB968/id/2764362

https://www.car.org/riskmanagement/qa/New-Laws/2024-New-Laws

[Jay Hinrichs]

Quote from @Andres Murillo:

Quote from @Sammy Lyon:

There are new laws affecting California transactions in 2024, some of which are very relevant to investors and house flippers.

According to the California Association of Realtors, starting July 1, 2024 most 1-4 unit properties that are resold within 18 months (aka flips) must disclose:

- repairs, renovations, room additions and structural modifications that were performed by a contractor with whom the seller entered into a contract

- the name and any contact info for the contractor for any work over $500

- any permits obtained

So you still can be an HGTV star, just make sure you do it by the book. :)

Have any of you flipping in the Los Angeles area been affected by these new disclosures?

It hasn't come up for me on a transaction yet and I'm curious how it's playing out in practice!

For more info, check out the law itself AB968: https://legiscan.com/CA/text/AB968/id/2764362

https://www.car.org/riskmanagement/qa/New-Laws/2024-New-Laws

All of the "owner-builder" folks that would get permits for work and then hire unlicensed, uninsured, discount companies to do the work for as cheap as possible will pivot. 

As a GC and investor - I've seen plenty of crappy work done on flips. Hopefully, this solves it. 

But the cynical side of my brain knows the worst flippers out there will find a workaround for it and continue delivering low-quality flips to unsuspecting buyers. 

what will happen is the wholesale price of the homes is going to have to go down.. this will squeeze wholesaler profits and less money for those that sell their homes that are in need of rehab renovation.